Newman Goverment predicts economic growth to double and Queensland to boom in two years, surplus by 2015-16

THE Newman Government has banked on Queensland to boom in two years, predicting economic growth will double to six per cent and deliver the State a fiscal surplus in 2015-16.

The Mid-Year Fiscal and Economic Review, released today by Treasurer Tim Nicholls, revealed a slightly improved deficit position of $7.6 billion in 2013-14 following modest increases in GST and property tax income.

Next year's fiscal deficit will plummet from a predicted $244 million to $644 million despite significant growth in projected revenue.

The following year the Government is predicting it will achieve its surplus commitment, although the figure is down from about $1 billion to $696 million.

Much of this improvement is based of growth hitting a six per cent in 2015-16 compared to the national figure of 2.5 per cent and spending kept under control.

Debt will peak hit more than $80 billion in the same year, more than $9 billion less than the Commission of Audit predicted following the Government's fiscal repair measures.

Mr Nicholls said the figures underscored the need to find ways to pay down debt and reduce the State's $4 billion a year interest bill.

The government is considering selling two electricity generators and leasing out two ports to pay down debt, but would only act if it had a mandate at the next election.

The treasurer doesn't support increasing land and payroll taxes, saying they'll devastate businesses and investors.

A further reduction of services would also be difficult with the state's ageing population.

"We're really held back until we address that debt issue. As a community we've got to have that debate,'' Mr Nicholls told ABC radio.

"There are no surprises here.''

A return to a fiscal surplus in 2015/16 is still predicted, but it will be less than the $1 billion previously forecast.

"We've predicted we'll get back in the black by 2015/16, not by as much as we had hoped,'' Mr Nicholls said.

"We had the natural disasters earlier this year, there have been a slight softening in coal royalties and some other tax revenues have come off the boil a bit.

"In the absence of any natural disasters or things from outside Australia, we'll be able to get back to surplus by 2015/16, which is what we said we'd do.''

The state is pinning hopes of recovery on the emerging liquefied natural gas industry.

It's expected to double economic growth in 2015/16 to about six per cent, when exports kick off.

Mr Nicholls says he hasn't over-estimated the surge.

"I'm quite confident those figures are good predictions, but there is no guarantee,'' he said.

Queensland's mid-year budget review comes a day after the federal government revealed a $68 billion budget deficit blowout over the next four years.

Mr Nicholls isn't fazed by the dire picture painted by the federal government, and says Queensland won't be badly affected.

While there will be a slight reduction in health funding from the commonwealth, the state is in positive territory in GST payments, Mr Nicholls says.

The state would also receive promised funding for its education reforms.

"We're reasonably comfortable, but that's not to say that times won't be tight,'' Mr Nicholls said.

"I don't think we can expect too much largesse out of Canberra, but they've certainly honoured their commitments to Queensland.''

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